Coronavirus-driven travel slump leads to mounting job losses as plane makers cut output and airlines curb flying
Companies that make parts for Boeing Co. BA and Airbus SE EADSY jets, and provide airlines with everything from engine spares to window shades, are shrinking rapidly in the wake of the pandemic-driven travel downturn.
The Precision Castparts unit of Berkshire Hathaway Inc. BRK.B +0.29% this week became the latest supplier to flag huge job cuts as the maker of aircraft-engine parts said it had shed 10,000 staff—30% of its workforce—since the start of the year.
Warren Buffett’s investment vehicle took a $10 billion write-down on its 2015 acquisition, highlighting how the crisis gripping the airline industry is expected to linger. The world’s two biggest plane makers signaled to suppliers that they plan to lower jet production for several years.
U.S. aerospace manufacturers have already shed more than 100,000 jobs since the start of the year, according to Labor Department data and regulatory filings, with the pandemic adding to existing pressures from the sharply reduced production of the still-grounded Boeing 737 MAX jet. Sector employment had climbed to almost a million at the end of last year and fell to 925,000 by June 30. Job cuts have continued to mount in recent weeks.
The biggest supplier on the MAX program, Spirit AeroSystems Holdings Inc., is cutting 8,000 jobs, around 40% of its commercial aerospace workforce. General Electric Co. is shedding 13,000 from its aviation unit, and other big suppliers such as Raytheon Technologies Corp., Howmet Aerospace Inc. and France’s Safran SA have disclosed cuts in recent weeks.
“We have received more production schedule changes this year than I think we’ve seen in the last five years,” said Spirit Chief Financial Officer Mark Suchinski on a recent earnings call.
Excerpt from WSJ
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